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Kentucky rural hospitals to receive Medicaid settlement funding


FRANKFORT, KY (WOWK) – Rural hospitals in Kentucky will receive funding from the settlement of a 13-year-old dispute regarding Medicaid funding rates. Gov. Andy Beshear and U.S. Senate Majority Leader Mitch McConnell said 54 rural hospitals would receive a total of $383 million in state and federal dollars

According to the governor’s office, the settlement convinced the federal Centers for Medicare & Medicaid Services (CMS) to offer funding in combination with the state’s liability of $93.9 million. The previous administration had budgeted an estimated $425 million in state funding to settle the case. Beshear said the settlement saved the state more than $300 million and provides long-awaited funds immediately back to rural hospitals.

“The funding is much-needed relief to our rural hospitals and health care workers that have been on the frontlines helping to fight the global pandemic,” Beshear said. “The hard work from our office along with support from Majority Leader McConnell and federal partners has resulted in millions of dollars in savings to the state and immediate payment to our rural hospitals. We expect to be issuing checks as early as next week.”

This litigation began with an administrative action in 2007 and then the lawsuit in 2013, all involving the rate-setting methodology used for acute care hospitals in 2007-2015, according to the governor’s office. TheFranklin County Circuit Court and the Kentucky Court of Appeals agreed with the hospital’s claim Kentucky Medicaid used invalid methodology. The case is pending before the Kentucky Supreme Court. 

“In the midst of the coronavirus crisis, I’m proud to work with the Trump Administration and Gov. Beshear to deliver urgently needed resources for more than 50 of Kentucky’s rural hospitals,” said McConnell. “The medical professionals at our rural hospitals have shown their courage and dedication every day throughout this pandemic, and it’s my privilege to thank and support them.”

Beshear and McConnell announced on April 3 the CMS approved the state’s request to recover Medicaid federal match rates and provide federal funds for a payment.

Pikeville Medical Center and King’s Daughters Health System in eastern Kentucky will both receive funding from the settlement, according to Beshear’s office.

“I want to thank Governor Beshear and Senator McConnell for bringing a positive resolution to this longstanding issue. The $8,043,076 that our hospital will receive could not come at a better time and will make a significant difference in our ability to deal with the ongoing pandemic and its financial impact,” Pikeville Medical Center Chief Executive Officer Donovan Blackburn said.

“The $19.6 million King’s Daughters will receive as part of this settlement will help us maintain critical health care services and providers in our communities,” said King’s Daughters Health System President and Chief Executive Officer Kristie Whitlatch. “This funding comes at a time of intense pressure, when our organization is managing both response to the COVID-19 pandemic and working to ensure access to care following the closure of Our Lady of Bellefonte Hospital.”

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